Bitcoin is the fastest and easiest way people do transactions now and it is regarded as the future of currencies in the world.
But the question is, how well do you know bitcoin? The number of people that knows about bitcoin isn’t educated, and this makes it difficult for such people to invest in it. If it’s your wish to be an investor in cryptocurrency, especially bitcoin, then you should learn something new about it before venturing into it.
What is Bitcoin?
Bitcoin is an electronic form of money, people use in making payments online to other people, without going to the bank or any banking institution. It is convenient because there is no third party involved. Bitcoin has some characteristics which make it more special, and due to that, it is regarded as the currency for the future generation.
However, bitcoin has been encrypted into computer languages, which is why it can be transferred irreversibly, as compared to the digital currencies we have in the world.
1. Bitcoin is a decentralized currency:
Bitcoin is a decentralized currency as compared to other traditional digital currencies. Decentralization of bitcoin simply means that the system is not controlled by any third party or not even the central government. You have the right to use bitcoin without worries of being seized or devalued. Due to the decentralized nature of bitcoin, you must be very careful investing, since it is likely you can lose everything, due to criminal activities online.
2. Bitcoin is highly volatile and unpredictable:
Bitcoin is a popular investment medium and due to that, it is highly volatile and unpredictable, which means the prices fluctuate from time to time. If you invest in bitcoin, you must know that it is not always you will make a profit. As an investor in bitcoin, you must be ready to accept this nature of bitcoin. It is also advisable that you invest the amount of money you can afford to lose, to prevent the issue of future losses.
3. Bitcoin is digital and Pseudo – Anonymous:
Unlike other traditional currencies, bitcoin is digital which makes it difficult for investors to touch or feel this cryptocurrency. Bitcoin is an electronic currency, which works online and can be traced using blockchain technology. In addition to that, bitcoin is pseudo-anonymous, which means it does not require giving out your personal information before investing. What you need is your bitcoin wallet ID for you to do all transactions, since it’s available online.
4. Avoid leaving a lot of money in exchanges:
With the help of modern technological innovations, you are always advised not to leave your bitcoin or other cryptocurrencies, in your wallet since your account is susceptible to hacking. Protecting your wallet with passwords and codes might protect you for just a little time because it isn’t the safest way as there are a lot of hackers online. To prevent such issues, you must always leave only a small amount of bitcoin or money in your wallet. Also, don’t make a vast exchange using any exchange medium.
5. Always think that you can diversify:
Despite bitcoin being a popular cryptocurrency, it is not safe to invest your entire money only into bitcoin. You must always think of diversifying your investment to other cryptocurrencies. Bitcoin is just one of the thousands of cryptocurrencies we have in the world, and also, Investing in other cryptocurrencies, reduces the risk of losing everything within the blink of an eye.
6. Be sure to learn the mechanics of buying and selling bitcoin:
As a beginner in bitcoin or cryptocurrency investment, it is very crucial to learn how to buy and sell bitcoin. By knowing the fundamentals, it is very likely to tell what happens along the line when you finish investing. It is advisable to join platforms that accept other kinds of cryptocurrency. Also, learn how to safeguard your bitcoins from cyberattacks and internet scammers.
7. Bitcoin is still subject to debate:
It is still not clear to the world, the origin of bitcoin and due to that, it faces a lot of criticism and also, it is a subject people still debate on. It is because of its characteristics, that’s why it faces such criticisms and debate. But with Bitcoin, investors earn a lot of profit which is why it still attracts more and more investors all over the world.
8. Bitcoin is a real currency:
Despite its decentralized nature, bitcoin is a genuine currency, you can use in purchasing much merchandise. Many organizations are accepting bitcoins as the payment medium, and it’s the prayer of bitcoin investors that it becomes worldwide. Microsoft Corporation, Expedia, and Newegg are examples of organizations, you can make a direct payment using bitcoin.
9. Bitcoin has some big detractors:
People purchasing bitcoin have been conflicting their thoughts, with the guidance of some powerful voices on the streets. For instance, Warren Buffett presented bitcoin as a “delusion” and “rat toxin squared”. Janet Yellen, who was the chair of the Federal Reserve, also said bitcoin is an “exceptionally theoretical resource” and “not a steady store of significant worth”. Former US President, Donald Trump, also does not admire bitcoin and claimed its value depends on thin air, which most of his followers thought to be true.
10. Bitcoin has a fixed supply limit:
As a cryptocurrency, it has a fixed supply limit which implies that the number of existing Bitcoins in the world will not grow larger. For this reason, it is considered immune to inflation. it is also considered a safe-haven asset. It is the future of currencies in the world and hopefully, someday, it will be used worldwide.
Bitcoin is the trend among the numerous cryptocurrencies we have in the world. As it stands to be the trend for a variety of reasons, such as its profit margin, it is very necessary to familiarize yourself with how bitcoin investment works, and probably, this article is the ideal choice for you. Thank you for reading.